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RealTime Economic Issues Watch

In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.

Recent Posts

Brazil’s Fiscal Adjustment: Chronicle of a Death Foretold?

by | July 7th, 2015 | 03:59 pm

Is a Brazil heading into a full-fledged fiscal crisis? Government officials say no, noting that President Dilma Rousseff, who has just completed a visit to Washington to try to repair ties with the United States, appointed an appropriately orthodox finance minister, Joaquim Levy, after winning re-election in 2014. Minister Levy announced an ambitious fiscal program […]

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After the Greek Referendum: A Democracy Mismatch in Public Debt Crises

by | July 7th, 2015 | 11:33 am

The Greek referendum on July 5 might look like a high point for democratic accountability, but it was not. When Greek citizens rejected the demands of their government’s international creditors, the outcome bound Greek politicians but not the creditors that have prescribed economic policy for Greece since 2010. The European institutions and the International Monetary […]

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It Is Up To Alexis Tsipras to Avoid Disaster Now

by | July 6th, 2015 | 02:57 pm

Greek voters yesterday overwhelmingly rejected further tax increases and spending cuts in a referendum on austerity measures demanded by Greece’s international creditors. While the “no” vote greatly strengthens the Greek government’s position domestically, it essentially has no value outside the country. It makes any future compromise between the government and creditors difficult to reach. The […]

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Worry but also Relief among Greece’s Neighbors

by | July 6th, 2015 | 01:54 pm

The rapidly escalating financial troubles that Greece faces worry its neighbors for three main reasons. First, Greek banks account for a significant share of corporate lending in Albania, Bulgaria, Cyprus, Macedonia, Romania, and Serbia. A collapse of the Greek banking system will have repercussions on the long-term viability of subsidiaries and branches abroad. The experience […]

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A Political and Intellectual Proxy War over Greece

by | July 2nd, 2015 | 04:15 pm

The escalation of the conflict over Greece is more than a dispute between the government of Prime Minister Alexis Tsipras and Greece’s international creditors. The conflict is a proxy for two wars—one intellectual and one political—in which the Greek people, especially the poor, have been taken hostage. The intellectual war is over the sustainability of […]

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Greece’s Future Is in Greek Hands

by | July 2nd, 2015 | 12:33 pm

The Greek government has dug itself and its people into a hole over the last week, as Prime Minister Alexis Tsipras has reversed himself on an ever growing list of key issues. His government is now suddenly in favor of a third bailout from the euro area (though excluding the International Monetary Fund this time), […]

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Can the Grexit Lemon Be Made into Lemonade?

by | July 1st, 2015 | 06:47 pm

With a referendum scheduled for Sunday and frantic negotiations spilling onto the front pages, the possibility of a Greek exit from the euro area, or Grexit, looms large. It is hard to see how Grexit could be avoided if the referendum results in a “no” vote. Such an exit is fraught with danger, yet it […]

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Turbulent Outlook for Greece

by , Simeon Djankov, and Angel Ubide | June 30th, 2015 | 03:29 pm

The escalating confrontation between Greece and its international creditors has further devastated Greece’s economic outlook, according to three PIIE experts. Jacob Funk Kirkegaard says that voter rejection of creditor demands in a referendum on July 5 will be disastrous, but even a voter approval will not necessarily reopen banks right away. Simeon Djankov says a […]

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What Does the Tsipras Referendum Bode for Greece’s Neighbors?

by | June 30th, 2015 | 01:17 pm

Much will be written on the likely deleterious effects of Prime Minister Alexis Tsipras’s surprise call for a referendum of the Greek rescue package. Former prime minister Georgios Papandreou attempted a similar step in November 2011, leading to the resignation of his government a few days later. Fortunately, the actual step of holding a referendum […]

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The Simple Solution for Greece that Europe Won’t Try

by | June 30th, 2015 | 11:31 am

In an interview with Ezra Klein of Vox, Adam S. Posen argues that the euro area lacks the fiscal transfer mechanism that exists in the United States enabling poor countries that get into financial trouble to be aided by wealthier countries that are part of the currency union. A breakdown in trust has changed the […]

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